Local Authority Funding: A Critical Tipping Point in Havering

Today, Gillian Ford, Chair of HRA writes in the Havering Daily about Havering Council’s current financial situation.

What a Year

The current economic climate is tough, it is certainly no different for local authorities. The difference being, local authorities have been seeing a reduction in funding for over 10 years. It has now reached a critical tipping point.

The government continues to use a financial formulae based on demographic data taken in 2011. The impact of this will vary from authority to authority, with some having seen reductions in demand and vulnerable groups.

However, Havering is unique in as much as its population has changed considerably. We have the second highest number of older people in London and the second fastest growth in children in the UK.

In itself, that is not a problem but the vulnerability levels within those groups have become more complex and more costly setting us aside from the majority of other local authorities.

So what happens now?

Government suggest they have increased funding to local authorities one example is the option for local authorities to use a Council Tax precept for social care. That is not government funding, it is us the tax payers paying more Council Tax, and the sad part is, it doesn’t cover the cost of the statutory social care pressures we are experiencing.

Is there a solution?

The Local Government Association which represents local government through cross-party representation is calling on the government to fund social care centrally, as it is not a sustainable or viable option to fund social care through the constant raising of Council Tax.

For Havering’s residents, we are now seeing 80% of the Council Tax we all pay going on adults and children’s social care statutory services and homelessness pressures.

What can Havering do about it?

The government’s response is you just have to find ways to save money to fund any deficits. Simple! No, it is complex and comes at a cost, a cost that has a social impact and a further cost to those already struggling. We have already reduced staffing numbers and increased fees and charges, reduced council committee numbers, and special responsibility allowances.

Councils, unlike the NHS, have to submit an annual balanced budget. The amount of complex needs is increasing, social care costs are rising, private landlords are leaving the rental market and legislation is about to change as to how many staircases are needed in developments six storeys or higher as a consequence of the Grenfell Tower fire. The legislation is yet to be finalised, stopping multiple housing developments that had been granted permission across the country, including Havering. These schemes will have to go back to the drawing board and then back to planning, placing long delays on building timescales, placing further pressure on the need for housing. The crisis is real and here and now.

What options are left to us?

Havering has no options other than to lobby the relevant government departments, DLUC, DfE, DHSC making informed representations as to Havering’s unique position and to find ways of making efficiencies elsewhere.

But what efficiencies?

There are a number of things that can be stopped, or delayed that can help reduce pressures, but it has reached the point that these can now have longer-term impacts increasing costs later on.

Since the last budget, work has been taking place to see what savings can be made on council operating services across all departments. It is worth saying at this point that the government Housing Revenue Account is not considered as part of the general fund and is dedicated to housing purposes. Capital funding is also independent of the general fund although any interest payments or revenue running costs would come from the general fund.

The options remaining are mostly unpalatable, come with risks, and come at a cost to residents. Over the coming months, you will have the opportunity to respond to a public consultation asking your views on the options. We genuinely want to hear your views as we all want the best for our borough, families, friends, and businesses.

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